Annuities Investment Advice

Camarda Wealth Advisory Group

As most clients know, Camarda does not typically recommend annuities. Still, this material may be helpful as a refresher, or to pass on to someone you care about. In most of the cases we’ve seen, the products are very expensive, and the high, often hidden costs, on top of very high taxation, can severely stunt wealth growth. Because annuities are often marketed heavily, and because they can be so hard to understand, you may want to learn from the tips below. If you are considering annuities, or if you already have them and would like an analysis and rescue plan, contact us to get a FREE Total Wealth Health Checkup

  • Complexity Annuities are some of the most complicated, poorly understood “investment” products on the market. These are actually life insurance policies that can pay high commissions to salespeople who are often not required to put your interests first.
  • High Taxes Annuities are taxes taxed at an investor’s highest rates. They don’t qualify for the lower capital gains rates, and capital gains are not forgiven at death. Since there is no “step up,” much more estate wealth can be lost to taxes than other investments like mutual funds, stocks, real estate, and so on.
  • Questionable Sales Practices Annuities are sometimes pushed even when they are not the best solution, especially when misleading claims of “no fees or commissions” or “I’m paid directly by the company” may hide the real cost and motives for high commission products.
  • Poor Understanding Many investors who buy annuities don’t really understand them, don’t need them, pay far too much for them, and ultimately may come to regret investing in them.
  • Are they right for you? Because of their life insurance nature, annuities can offer valuable features but these features are only worth paying for if you need them, and, depending on the annuity, can come at extremely high tax and products costs.
  • Hard to Spot Costs Commissions, product costs, and tax treatment are often not easy to find for consumers – or well explained by salespeople! – which can make smart shopping and cost comparisons nearly impossible.
  • Often the Wrong Decision And with lots of marketing hype and high commission sales pressure out there, it can be too easy to make the wrong decision – a decision you could feel stuck with for a long, long time.

See Important Disclosure Information at:

Estate Plan Secrets & How To Avoid Estate Tax (Part 2 of 2)
Last Minute Tax Tips & Tactics – Part I

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